Xcel to return $8.2 million in excess profits to customers

Xcel Energy earned more than its regulated return in Colorado in 2012 and as a result is proposing to return $8.2 million to customers, the company said Thursday.

If approved by the Colorado Public Utilities Commission, the refund will begin July 1 as a 0.61 percent reduction to base electric rates for the next year, the company said.

Typical residential customer bills would drop by 25 cents a month, while typical small-business customers would see a decrease of 52 cents, the company said.

The refund mechanism was agreed upon in Xcel's last rate case.

"This is money customers would not have gotten back without that mechanism," said Bill Levis, director of the Colorado Office of Consumer Counsel.

The office represents residential and small business customers in rate cases.

In order to recoup the excess profits in the past, it would have been necessary to file a complaint with the utilities commission, or state regulators would have to wait until the next rate case to settle up, Levis said.

Xcel subsidiary Public Service Company of Colorado had a net income of $458 million in 2012, according to federal filings.

When Xcel filed its earnings estimates with the PUC in April, it calculated that its return was about 9.94 percent — under its 10 percent cap.

Those figures were challenged by the PUC staff, the consumer counsel and Colorado Energy Consumers, which represents large business customers.

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A settlement was reached agreeing that the company had earned 10.27 percent and would have to return some of the earnings, according to a PUC filing.

"This was the first time an earnings test was made under the rate case, so there were some interpretation issues," said Mark Stutz, an Xcel spokesman. "We worked them out."

The 2012 rate case was the first multiyear rate case approved in Colorado, and Xcel made a commitment not to seek an increase in base rates until 2015.

"This refund demonstrates that forward-looking regulation works well for both customers and the company," David Eves, chief executive officer of Public Service, said in a statement.

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